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Friday, January 30, 2009

WSJ article on Peter Schiff is out!

Early last year, Richard De Gennaro, a retired Harvard University librarian, put $100,000, about 15% of his assets, into a Euro Pacific account that included Canadian Oil Sands Trust, which focuses on crude-oil projects in Canada, and the India Capital Growth Fund, which holds investments in companies that do business in India.

Both investments took big hits in 2008, compounded by the fact that the Canadian dollar and the Indian rupee fell 18% and 19%, respectively, against the U.S. dollar. The 83-year-old retiree's account is now worth about $37,000, a 63% plunge. Mr. Schiff "goes around saying that he was right," says Mr. De Gennaro. "He was right about one thing and wrong about everything else."

Among investors who turned to Mr. Schiff's firm just as his strategy began to falter, Brian Kullberg, a design engineer in Portland, Ore., says he started to worry about the state of the U.S. economy in early 2008. He put $70,000 into a Euro Pacific account, hoping it would benefit as the U.S. economy and the dollar weakened. By late January 2009, his investment had shrunk to about $25,000.

Most had one thing in common last year: heavy losses. A number of investors said their Euro Pacific portfolios lost 50% or more in 2008, worse than the 38% drop in the Standard & Poor's 500-stock index last year. People familiar with the firm say that hardly any securities recommended by Euro Pacific brokers gained ground in 2008.

It's confirmed . . . Brian was my college roommate for 2.5 years. What a small world. Too bad we didn't keep in touch over the years . . . I could've saved him some money! I doubt he would've believed me, though, if the past is any guide. Good guy, though.

Warren's sending around stuff on people starting to become alarmed about Fed swaps. All the worse for the Schiff investors if that blows up.

Thanks for the kind words. I don't know how we can do that and even if we did, I am not certain that it would make much difference because most of Obama's economic team and pretty much all of mainstream economics these days, are filled with neoclassical economists, who have disdain for keynesian/demand-side economics.

That's unreal. Yes, it sure is a small world. Too bad for that is right! You definitely would have saved him a lot of money. From what I understand one of the anecdotes left out of the Schiff piece was about a 78 year old woman, who Schiff told to take out a mortgage on her home in order to buy foreign stocks! Coming from a guy who was as bearish as you can be on housing that strikes me as unbelievable! But the WSJ seems to be a Schiff apologist these days.

What is Warren sending around? I haven't seen it.

Does Warren know that about half those swaps ($250 billion) mature in less than 15 days? Could be the reason for dollar strength against euro right now. ECB may be in the market buying dollar to settle swaps.